3) The auditor must gather sufficient and appropriate evidence during the course of the audit. Sufficient evidence must A) be well documented and cross-referenced in the audit documents. B) be based on sources that are external to company. C) provide evidence that prove or disprove an audit objective/assertion.
The company being audited has an internal auditor that is both competent and objective. The auditor wants to assign tasks for the internal auditor to perform. Under these circumstances, the auditor may Allow the internal auditor to perform tests of internal controls. Audit plans are modified to suit the circumstances of particular engagements.
Subsequent to the issuance of an auditor's report, the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts. After determining that the information is reliable, the auditor should next:
If an auditor is obtaining an understanding of an issuer's information and communication component of internal control, which of the following factors should the auditor assess? The classes of transactions in the issuer's operations that are significant to the issuer's financial statements.
An auditor's decision either to apply analytical procedures as substantive procedures or to perform tests of transactions and account balances usually is determine d by the. Auditor's determination about whether audit risk can be sufficiently reduced.
The auditor should. Consider the possibility of a misstatement in the financial statements. With respect to fraud or error, the auditor should assess the risk that fraud or error may cause a material misstatement of the financial statements and should design the audit to.
Client to authorize the predecessor auditor to allow a review of the predecessor auditor's audit documentation. In an environment that is highly automated, an auditor determines that it is not possible to obtain sufficient appropriate audit evidence solely by performing substantive procedures on transactions.
An auditor interviews and observes appropriate personnel to determine segregation of duties. During the initial planning phase of an audit, a CPA most likely would. Discuss the timing of the audit procedures with the client's management.
Before accepting an audit engagement, an auditor should make specific inquiries of the predecessor auditor regarding. Disagreements the predecessor had with the client concerning auditing procedures and accounting principles. In developing an audit plan, an auditor should. Perform risk assessment procedures.
One reason the independent auditor applies analytical procedures with regard to the client's operations is to identify. Unusual transactions. Analytical procedures used to form an overall conclusion of an audit generally would include.
A CPA is conducting the first audit of a nonissuer's financial statements. The CPA hopes to reduce the audit work by consulting with the predecessor auditor and reviewing the predecessor's audit documentation. This procedure is. Acceptable if the client and the predecessor auditor agree to it.
The auditor has an active responsibility to make continuing inquiries between the date of the auditor's report and the date on which the report is submitted. On February 25, a CPA issued an auditor's report expressing an unqualified opinion on financial statements for the year ended January 31. On March 2, the CPA learned ...
Information, which existed at the report date and may affect the report, comes to the auditor's attention. As of August 13, a CPA had obtained sufficient appropriate audit evidence with respect to fieldwork on an engagement to audit financial statements for the year ended June 30. On August 27, an event came to the CPA's attention ...
All subsequent events that occurred through August 27. On February 9, Brown, CPA, expressed an unqualified opinion on the financial statements of Web Co. On October 9, during a peer review of Brown's practice, the reviewer informed Brown that engagement personnel failed to perform a search for subsequent events for the Web engagement.
The event was properly disclosed by the entity, but the CPA decided not to dual date the auditor's report and dated the report August 27.
A. Griffin audited the financial statements of Dodger Magnificat Corporation for the year ended December 31, 2014. She completed gathering sufficient appropriate evidence on January 30 and later learned of a stock split voted by the board of directors on February 5.
The auditor's responsibility for obtaining an understanding of internal. control for a large public company, when an opinion is issued on the. effectiveness of internal controls, is significantly greater than the understanding. necessary when the auditor is solely expressing an opinion on the financial.
controls are operating effectively are (1) inquiring of appropriate personnel. regarding the operation of controls; (2) examine documents and records. when there is a trail of evidence that the control is/is not operating (e.g., a.
company, the auditor obtains an understanding of controls for all significant. account balances, classes of transactions, and disclosures and related. assertions in the financial statements. In contrast, for an audit of a nonpublic. company or a smaller public company, the auditor will obtain an understanding.
For financial statement-only audits, the. auditor does not issue an opinion on the effectiveness of internal controls, but rather the focus is on understanding controls that are relevant to the. audit in order to identify and assess the risks of material misstatement.
Auditors are required to perform integrated audits, an audit of the financial. statements coupled with an audit of internal control over financial reporting, on audit engagements of large publicly traded companies (accelerated. filers). For integrated audits, the auditor issues an opinion on the.
a method of auditing transaction processed by IT whereby the auditor embeds a module in the client's application software to identify transactions with characteristics that are of interest to the auditor; the auditor is then able to analyze these transactions on a real-time, continuous basis as client transactions are processed
public company, the auditor obtains an understanding of and performs tests of. controls for all significant account balances, classes of transactions, and. disclosures and related assertions in the financial statements. In contrast, the extent of controls tested by an auditor of a nonpublic.
1) The auditor must be without bias with respect to the client under audit. 2) The auditor must adopt a critical attitude during the audit. 3) The auditor's sole obligation is to third parties. 4) The auditor may have a direct ownership in the client's business if it is not material.
Au auditor strives to achieve independence in appearance to: 1) Comply with the auditing standards of fieldwork. 2) Become independent in fact. 3) Maintain public confidence in the profession. 4) Maintain an unbiased mental attitude.
1. A CPA's retention of client records as a means of enforcing payment of an overdue audit fee is an action that is : 1) Not addressed by the AICPA Code of Professional Conduct . 2) Acceptable if sanctioned by state laws. 3) Prohibited under the AICPA rules of conduct. 4) A violation of GAAS. 3.
1) A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan. 2) A fee based on the outcome of a bankruptcy proceeding. 3) A fee based on the nature of the service rendered and the CPAs expertise instead of the actual time spent on the engagement.
The AICPA Code of Professional Conduct states that a CPA shall not disclose any confidential information obtained int he course of a professional engagement except with consent of the client.